With Instant
Each product has a category from Shopify, such as Rain Coats, and product details such as color, material and activity where they fit. Your shop uses them as filters, so a shopper can choose Merino and Hiking and see only those products.
The collections are made in Shopify, each with a rule. Instant does not make or change collections. It fills in the product information that the rules read, such as the category and the tags.